Investors aren’t excited about El Salvador’s bitcoin bond. The crypto-backed offering hasn’t drawn a single buyer, according to Bloomberg.
Millennial president Nayib Bukele is seeking $1 billion for the crypto-backed bond, though instead of financing he’s received criticism from credit agencies and the International Monetary Fund.
The IMF blasted Bukele’s call to make bitcoin legal tender, and has urged the government to reconsider its reliance on the cryptocurrency.
The country’s conventional bonds due in 2032 yield 24%, a steep level that suggests markets perceive the debt to be high risk and are bracing for a default. Bloomberg data shows that yields on El Salvador’s conventional bonds have fallen further than every other nation except those of war-torn Ukraine.
According to a Bloomberg report, Bukele’s plan for bitcoin bonds in came November when the nation’s dollar debt was at an all-time low.
In February, Fitch Ratings slashed El Salvador’s rating to CCC, pointing to its increased dependence on short-term debt and limited financing sources. Nonetheless, El Salvador’s finance minister recently said there’s “zero risk” of a default.
